Introduction of new rent pressure zones a sign of failure

The extension of the rent pressure zones (RPZ ), while welcome for tenants in the area, is a sign of the Government’s failing housing policy in Galway, according to a Galway-East TD.

Fianna Fáil TD Anne Rabbitte's comments came after 19 new RPZs were introduced on Monday including Athenry-Oranmore and Gort/Kinvara in Galway. These designated areas will mean rents cannot be increased by more than four per cent per annum.

Deputy Rabbitte says although it is welcome news for those facing regular rent increases, it is another "test" the Government is failing.

She says: “It is bittersweet that Athenry-Oranmore is now classed as a RPZ. It is welcome for those in private rented accommodation who have faced regular price increases. Yet today’s classification is another sign that the housing crisis is only getting worse.

“We know rental costs are soaring across the country. This is due to a lack of social and affordable housing. The housing crisis has been this Government’s biggest test. They are completely failing this test and more must be done to support young families across Galway.”

Zero properties within HAP limits

The announcement of the new RPZs coincided with the publication of a new study by the Simon Communities of Ireland, which showed that there are zero properties within HAP limits in Galway city.

The Locked Out of the Market XIV report released this week by the Simon Communities of Ireland, the 14th study of its kind, showed that there were no properties at all available to rent in Galway city within the Rent Supplement/HAP limits across the four categories; single person, couple, couple/parent with one child, couple/parent with two children. An average of 24 properties were available to rent in Galway city during the snapshot three-day study in April 2 to 4 2019.

The homelessness charity say this trend is extremely worrying, given that 91 per cent of social housing delivered in 2018 in Galway city was through RAS/HAP tenancies.

Karen Feeney, head of client services at Galway Simon Community said the private rental market is not adequate to deliver the level of social and affordable housing required locally, and that other approaches, as well as preventative measures, are vital going forward.

“However, the latest Simon Communities study shows that affordability of rent is a huge issue as there is very clearly a significant gap between the HAP limits and market rents. We see this ourselves every day in our frontline services as we are also finding it extremely difficult to source rented accommodation within the HAP limits for those we support. We know too well that people who pay these top ups in rent, can end up having to choose between essential bills like heat, light or food and paying their rent. It is a vicious cycle and unfortunately people end up paying the ultimate price through involuntarily becoming homeless.

“The crisis is worse now than at any other time in the 40 years since Galway Simon was founded. It is clear that the total lack of an accessible private rental sector and limited social housing has driven this increase. The building rate of social housing in Galway just simply is not anywhere near what is required to address the number of people in emergency and homeless services, or on the social housing waiting list."

Galway’s 'rentirement' property plight

Kevin Flaherty of Brandwood Property Management echoed Galway Simon's concerns, highlighting those who are retiring while still renting accommodation could see their pensions being "swallowed up".

Mr Flaherty said: "Plenty of people do not own their own home but rent their home, privately from a buy-to-let landlord, with many currently in their fifties and early to mid sixties. The majority of these people are due to retire with little more than the State pension of €232 per week and possibly a small private pension to top it up, which could leave the average retired person with a weekly disposable income of approximately €300 per week, all of which will be swallowed up on rent.

"The average rent in some areas now stands at €1,200 per month in some areas, so the majority of the retirement income will be eroded with rent. In years gone by, many retired people would have benefitted from a council bungalow, with a nominal rent, but unfortunately for them a lot of this housing stock was sold off in the 1980s and many have fallen into the hands of the new gentrified owners, something that was not intended under the original social housing plan, as set out back in 1950s and 1960s.

"When we examine the city private rental market, bungalows are in scarce supply, developers do not seem to construct them anymore. With rising land prices, bungalows ceased to be built, primarily as they take up a larger footprint, than a two/three storey house, due to all the living quarters been on one level, instead of over two or three levels, and ultimately profit margins are lower on bungalows.

"As demand continues to rise for bungalows around certain parts of the city, we at Brandwood Property Management envisage that supply will remain the same and we know what happens when demand surpasses supply - prices for bungalows will no doubt increase. We encourage people with views of this topic to contact us by calling 091 396360 or emailing [email protected]."